Ready to Hire = Ready to Fire

Jeff Bennett of incredibly cool service Swap.com (and a TechStars Boston mentor) posted a deck on hiring for startups he used in helping out with the Mass Challenge companies. If you’re a startup and you’re thinking of starting to hire your first employees, you’d be well-served to give it a once-through (if not a twice-through or thrice-through!).

One thing I wanted to add to the discussion is the notion that if you’re “ready to hire” then you also must be “ready to fire.” All too often, entrepreneurs put tremendous thought, time, and care into the hiring process (as we should!) but fail to be as diligent when it comes time to let those same employees go if the fit isn’t right.

Layoffs driven by lack of cash are one thing – they happen and your decision process to let people go is largely out of your direct control. So that’s straightforward. But the more problematic situations are when you have hired wrong (and it WILL happen!) and you need to terminate that person.

Entrepreneurs are hopeful, optimistic people. QED. We couldn’t do what we do without being somewhat irrational 🙂 .

At the risk of sounding melodramatic, bad employees are often like a cancer. Their bad attitudes, their bad cultural fit, their bad work ethic – and whatever else makes them bad for your organization – will impede the rest of your company. Your good employees will question your judgment the longer you keep bad employees around. They’re not stupid (or you wouldn’t have hired ’em and kept them around!!). These bad employees WILL slow your business down. In case you haven’t had your morning coffee yet: slow = bad.

Firing people is hard. It should be hard. You’re fucking with their livelihood and probably their families. That’s why we try so hard to hire right. But you will have to fire people and you must be able to do it. The smaller your company is, the less bandwidth you have to “fix” a bad hire. Cut them loose. Have a good cry and/or a stiff drink. Move on.

My friend Will Herman has put together some useful thoughts on the firing/layoff process that’s worth checking out.

Net-net: don’t hire unless you’re also ready to fire.

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2 comments

  1. Apolinaras "Apollo" Sinkevicius

    Shawn,
    Some good points. One point I would like to bring up is that a lot of times in startups we think we need a certain skill-set in a person, but end up being wrong (sales people and programmers tend to be those we make most mistakes with). We may have thought at the time the person would be a good fit, but we are wrong.
    So it is only right for a company (and you, as a leader) to own up to the mistake, pay the person say a month or 6-week severance and let them go with a letter explaining there was no wrong-doing. Why severance? Because you have to pay for your mistakes. And you will be more likely to fire quicker and cause less damage to the company. If the employee did not misrepresent themselves, if they did their best, but their skills or cultural fit was not perfect, than it is the right thing to do to compensate them for your mistake.

    In my experience, cost of severance had a good ROI. One wronged ex-employee can cause a lot of damage to your reputation. Do the right thing and it is very likely you will get goodwill back.

  2. Jeff Bennett

    Shawn – you are right on the hiring & firing. i articulated this in the presentation…but did not have it in the ppt. very good point indeed that I am glad you posted about! Jeff

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